A blog on issues affecting Australia's newsagents, media and small business generally. More ...

Month: May 2011

Draft customer letter on Fairfax TV Guide mess

Here is a draft letter I have put together for customers about the Fairfax TV Guide situation. It’s what I would be giving to my customers, retail and home delivery, to seek their support if I were affected by this in any of my newsagencies.

For years now the TV Guide has been provided inside your copy of The Sydney Morning Herald and The Sun Herald. Now, Fairfax, the publisher of these newspapers, wants us to manually insert the TV Guide in the titles and let home delivery customers choose the day on which they want them delivered.

Fairfax has said it will pay newsagents 15 cents to do this work.

We estimate that the work will cost close to 75 cents extra per delivery once we cost the insertion, managing the extra delivery and other changes in deliveries. It will also slow the home delivery process down.

Just to let you in on the process, we have two main newspapers we currently deliver. We will now have three since there will be copies of the Sun Herald with the TV Guide and copies without – depending on customer requirements. The same for The Sydney Morning Herald. Managing this extra load and similar looking packaged to deliver at 5am presents all sorts of challenges for which Fairfax is not prepared to compensate small business newsagents.

We are frustrated that Fairfax announced the change to readers without consultation with newsagents, without considering the time and financial cost to our family run businesses.

This is another example of big business treating small business poorly, pushing costs down to small business so that big business can save and increase profits.

It is like a boss requiring a worker to do an hour of overtime and only paying them for fifteen minutes.  Would you do that?

If we do what Fairfax wants we will be worse off financially. Your average newsagent in Australia makes around $50,000 a year for a sixty-five to eighty hour work week and a coupe of weeks a year on holiday (if we are lucky).

Please help us by letting Fairfax know what you think of this move. You can email Fairfax at…

I am not posting this draft letter here advocating that newsagents copy this. Use it to think of what you would put in your letter to your customers.

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Newsagency challenges

Timely warning from GNS on outposts

outpost-wpark.jpgTed Rogan, GNS Chairman, writing in a recent GNS newsletter warned newsagents in shopping centres about the need to outpost – to take casual leasing space outside their newsagency at key seasonal times.

Ted’s timely warning was specifically about Back to School.  He shared the news that GNS had been approached to supply outpost only businesses.  GNS refused to agree to this, maintaining its support for newsagents.

Outposting is vitally important to shopping centre newsagencies.  I have seen situations where two or three outposts through the course of a year can more than double the profit achieved by a business.  The keys for success with an outpost are:

  1. Location.  Take only a location which are are certain will deliver the traffic to justify the rent.
  2. Be bold.  Timid outposts deliver timid results.  Go big and bold.  Among the best outposts I have seen at the back to School outpost at Macarthur Square in Sydney and the seasonal outposts at Roselands.  They are big and offer a diverse range of product – far more than available in the newsagency for the seasons they cover.
  3. Cost structure.   Buy well (very well) and staff at the lowest cost possible.
  4. Leverage the main business. Use the outpost to promote the permanent business you have in the centre.  Do this with a promotion or some other activity which drives outpost customers to the main newsagency.

As Ted Rogan says, newsagents in shopping centres should contact their landlords ASAP to lock up space for Back to School.  Stop a group outside the newsagency channel from sneaking in and taking this business from you.

The photo is of the Mother’s Day outpost created by the team at newsXpress Wetherill Park.  The Wetherill Park team regularly outpost with tremendous success.

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Newsagency opportunities

Post Mother’s Day moves

post-mday1.JPGThe first step of our post Mother’s Day plan was to open up the front of the shop so that our hero card department could be more easily seen and to bring a range of magazines to the front of the shop to show off range.

Click here to see the before shot.  The photo with this post is the after shot, well sort of.

While it is nowhere near as busy as the Mother’s Day display, this is designed to present a more whole of business view – thanks to being able to see deeper into the shop.

We are the only shop promoting magazines into the mall like this.  We chose the titles and decided on placement carefully.  On the rear in a different selection, targeting the type of shopper who tends to browse in our newsagency.

We have more moves planned.

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magazines

Ferrari partwork fails for us

ferrarimag.JPGDespite considerable promotional effort including a behind the counter display and this high traffic location impulse placement, we have been unable to move any serious quantities of the Ferrari part series.  11 copies out of 70 in fact.  Had this title been released outside of the Easter / Mother’s Day business and away from other part series launches it may have done better.  While I understand that this partwork has sold well in some locations, it’s not worked for me.

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partworks

News shuts Alpha magazine

News Limited today announced that the June issue of Alpha magazine would be the last. The magazine has struggled since they disconnected it from News Ltd newspapers and changed the revenue model for retailers.  That said, it is disappointing when any magazine closes.

The bad news in today’s announcement by News is that the company has licensed specialist titles (and associated websites) Modern Fishing, Modern Boating, Overlander 4WD, Truckin’ Life, Live To Ride, 2Wheels, Chopper, Tattoo and Scooter to Express Publications.  I label this bad news because of Express bags much of what it distributes and sends old issues out with new, leaving newsagents to carry the cost of sending back the old stock so that it can be re-bagged and sent back out. Hopefully, Express will not condemn these titles to bagging.

Click here for the story in The Australian.

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magazine distribution

Coming out of Mother’s Day

With Mother’s Day over, there is a gap before the Mid Year Sale, if you do that, and Father’s Day.  This is a terrific opportunity for newsagents to try new things and to reinvent their retail space.

Here are some suggestions looking for opportunities over the coming weeks:

  1. Run your own Mid Year Sale.  Get together everything you want to quit and price it to quit.
  2. Maybe get products together and run a winter sale.
  3. Expand your lines.  Start experimenting with some new lines.  If you are not sure where to start look at card and magazine sales.  In data for each is guidance as to other products you could sell.
  4. Move departments to the front.  Consider bringing to the front of the shop departments which are buried in the back of the shop.  Let passers by know that you have these items.
  5. Develop a roster of magazine promotions.  Use the front of the newsagency to promote magazine categories which don’t often get a run at the front of the shop yet which benefit from exposure: food, wedding, crafts, sports.
  6. Refresh.  Clean out your window and start again.  Take everything off your counter and create a cleaner more focused offer.

These are suggestions designed to get you thinking about your own opportunities.

Too many newsagents act as servants, responding to supplier direction.  Right now there is an opportunity for you to take charge and make some smart moves in your newsagency.

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Newsagency opportunities

The federal government competes with newsagents, again

dsc03444.JPGThe Mother’s Day catalogue from the federal government owned Australia Post shops was out to take sales from newsagents and other independent family-owned retailers.  The catalogue offers Mother’s Day cards, cookbooks, novels, CDs, DVDs, notepaper, gift pens, a sewing machine (yes, seriously!), photo frames, cameras, phones, computer mouse … all sorts of products which have absolutely nothing to do with providing a postal service.

That we have more than 800 government owned retail shops selling these items which are readily available in privately owned retail businesses is appalling.

Successive federal governments of various political leanings have allowed the Australia Post elephant to get bigger and bigger, to wreak more damage on family owned businesses like newsagencies.  As I have blogged before, I contend that the act under which Australia Post operates is being breached by their reach into non postage products and services.

None of these politicians, labour and Liberal, can claim good small business credentials when they allow Australia Post to hurt newsagents and other small family run businesses in this way.

We are the average Australians they all so often claim to serve yet they fail us by allowing the Australia Post elephant to get bigger by taking business from independent retailers.

What do I want? I want Australia Post to get out of being a general retailer and to go back to focusing on postage stamps, postal services and products which very specially relate to these two areas.   sadly, we don’t have politicians with the balls to make this happen.  The result will be more jobs lost.

Australia Post government owned stores are doing more damage to our independent and privately owned retail channel that the proposed carbon tax and any other government initiative newsagents currently have issue with.

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Australia Post

And they complain about newsagent compliance!

Newsagents are often labeled by both magazine distributors and some publishers as offering poor compliance.  I was on five supermarkets over the weekend and every one had titles from Pacific magazines in their ACP Magazines funded Royal Wedding stand.  They had ACP Royal Wedding stock elsewhere in-store whch could have filled the slots.

While I think it makes sense to chase sales for the overall category rather than one supplier versus another, supermarket performance around this stand is a good way of measuring their compliance.  In the five supermarkets I visited the compliance was poor,

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magazines

Promoting health magazines to women

whealthmags.JPGWe have been promoting our three top-selling health related magazines for women with this full face display in our women’s interests section.  This is in addition to a co-location campaign for each which sees the titles in another location in store.  In addition to showing off the full cover of each magazine, our goal with this placement is to drive sales of more than one title.

Our women’s interests section is next to women’s fashion.

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magazines

Strong Mother’s Day 2011

mothersday-k1.JPGEver since Easter, Mother’s Day cards and gift sales have been strong.  I think that the Royal Wedding has played a role.  I have certainly seen some wedding magazines purchased as Mother’s Day gifts.

The Royal Wedding effect aside, the feel about Mother’s Day this year is more optimistic than in 2010.  This is reflected in traffic as well as sales.

We have been running with cards and Mother’s Day books right across the front of the newsagency, facing into the mall. This prime space commitment has worked a treat.  Sure there is far more browsing of cards and therefore work to tidy them – but the sales result is worth it.

With the big day now here, the challenge is … what’s next?  It is months to Father’s Day.  We are planning a series of promotions back to back, some we will advertise externally while others we will run using existing shop traffic.

So, while Mother’s Day is (almost) over for another year, the marketing calendar is full with activities to leverage the growing optimist we see and hear from shoppers.

Happy Mother’s day to all the mum newsagents.

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Gifts

Selling Royal Wedding magazines

weddingmagsmay8.JPGThis is the display we have been running at the counter since Friday.  In the foreground you can see the range of wedding related titles for easy impulse purchase.  Behind this, on the wall directly behind the counter you can see the bigger format display promoting the wedding titles we have in-store.

We have have a display right on the lease line facing into the mall, wedding titles with our weeklies display as well as wedding titles doward the rear of the magazine department with women’s titles.

We are running with a policy of buying sock from elsewhere if we run low.  We will not sell out for the next few days at least.  That is the plan.

the counter placement is working very well for us.  You can see the moment when people see one or two titles and think I should grab one of these.

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magazines

Great promotion from Mildura Living magazine publisher

milduraliving.JPGCheck out the help provided by the publisher of Mildura Living to newsXpress Klemms Mildura for promoting their magazine.

With good pull up banners costing as little as $200 (and even less), they are a cost effective and valuable way for promoting products like magazines.  The banners can be easily moved – providing more flexibility that the more traditional magazine display in a newsagency or other retail business. They can also be easily incorporated into displays or places next to product displays as shown in the photo.

I’d like to see more publishers provide marketing collateral like this for Mildura Living.I am sure that newsagents would welcome and use it – as we are seeing in Mildura.

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magazines

Fairfax Media TV Guide Cost Benefit Analysis

NANA has developed a Cost Benefit Analysis (CBA) spreadsheet with the aim of the final information for presentation to Fairfax Media (FM), showing the true costs of the TV Guide insert process. FM will be given the invitation to review any of the figures which are presented. At all times Newsagent anonymity will be maintained, unless the Newsagent gives written permission to NANA for Fairfax Media to review a specific Newsagents’ data.

An early determination, from limited input, has revealed that this process would be a multimillion dollar loss across NSW Newsagents. Therefore, the importance of participating in this evaluation, for the full 5 week period, cannot be overemphasised. It is for your benefit and clearly elicits the dollar impact on your business.

To obtain the spreadsheet, relevant to your version of Excel, go to the NANA website www.nana.com.au and also read this article in full.

I have published this information from NANA with their permission.

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newspaper home delivery

EPAL responds on EFTPOS issue

Click here to see a letter I received yesterday from my local member of parliament after he raised the EFTPOS issue on my behalf.  It is a letter to him from Bruce Mansfield, CEO of Eftpos Payments Australia Limited.  It is the same letter Mansfield has sent to others who have complained about this issue.

Mansfield peddles his spin beautifully, almost believably.  Oh, it is not us.  And … newsagents have control.  No, we don’t.

In the letter, Mansfield says that newsagent can mange the mix of transactions and through this the EFTPOS fees.  He clearly has not spent any time working in a newsagency.  If he had he would not have made such an ignorant statement.

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EFTPOS fees

Chris Lilley selling magazines

chris-lilley1.JPGOur team at Knox has placed the latest issue of The Monthly at the counter next to triple j magazine.  The two Chris Lilley covers work well together.  Yesterday, not long after creating this display, a customer purchased both titles purely on the strength of the Chris Lilley cover stories.  I’d encourage newsagents to consider copying this approach at their counters.  Lilley is receiving a ton of publicity at the moment for his forthcoming TV show.  No other retailer will promote these titles in this way.

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magazines

Promoting MasterChef magazine with co-location

masterchef2.JPGIn addition to tactical placement of the new MasterChef magazine display unit, we have been promoting the title with this aisle end display in-store, facing shoppers as they enter our magazine department.

Unit sales of food titles in our newsagency were up 182% in April 2011 compared to 2010.  While it is the fifth best category in terms of year on year growth, the growth number achieved is still extraordinary.  Part of that success is due to the MasterChef title – hence our preparedness to invest time and prime space in promotion.

I recently asked whether food titles were losing their appeal.  I don’t think so, not across the board at least.

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magazines

Mother’s Day Books Selling Well

mothersdaybooks.JPGWe have been enjoying good sales from our Mother’s Day Book Sale with shoppers usually buying at least two books in each sale.  Since we are not a book shop, many book sales are in addition to the destination purchase of cards, magazines or newspapers.  Given the good margin, book sales are performing a welcome role enhancing our overall margin story.  We have been promoting the Book Sale with a terrific catalogue featuring Mother’s Day focused titles as well as with tactical placement – to drive the impulse business.

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Book retailing

QNF Board to seek compensation over Royal Wedding magazine supply issues

The QNF Board is to meet with Eugene Varricchio, Group General Manager – Retail & Distribution, ACP Magazine on Tuesday next week to discuss the why newsagents were disadvantaged compared to other retail channels over the supply of Woman’s Day and the Australian Women’s Weekly.  The QNF Board will also seek to discuss these points as outlined to QNF members this late today:

Firstly, monetary reimbursement crediting the wholesale cost of all quantities of these two Royal Wedding magazines received by Queensland newsagents or by discounting subsequent issues to similar value.  In the case of newsagents who were not delivered any Woman’s Day or Australian Woman’s Weekly they should receive the profit they would normally receive each week/month.

Secondly, ACP to formulate in consultation with the QNF, a special Queensland newsagents promotion which will drive consumers back into our newsagents businesses.

It’s a gutsy move by the QNF to not only seek compensation but to disclose this to newsagents at this stage.

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magazine distribution

Handling the Body+Soul $2.00 discount

News Magazines is running an online promotion for Body+Soul magazine with the new issue allowing online customers to purchase the magazine for $4.95 rather than $6.95.  Here is some advice for the newsagents using the newsagency software from Tower Systems for handling this:

Add a new stock item (with a generated/Alt+G barcode) called “Body+Soul Coupon Offer” with a PLU of BSCO and a price of $2. When a customer comes in with the coupon, scan Body & Soul into POS, do a qty of -1, then enter the PLU BSCO. This will sell the coupon item for -$2.00, which will bring the sale total down to $4.95. You’ll also be able to Alt+T the BSCO item at the end of the promotion and see how many coupons were redeemed (the QOH will be a negative value of however many redemptions there were).  This will be the value you claim back through Gordon and Gotch.

Hopefully, the online promotion drives newsagency traffic for this title.

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magazines

Another example of a flawed magazine distribution model

sudoku-overload.JPGI can’t work out why Gordon and Gotch decided to increase our supply of this imported Sudoku title from 6 to 11.  Sure we sold out of 6 with the December 2010 issue and they increased us to 7 for the next issue of which we sold 6.  A smart allocation would have been to hold us at 7 for several issues before increasing again.  or, they they had to increase supply because of floor stock which they had to send somewhere, why not an increase to 8? This increase to 11 has no justification despite the excuses which I sure the folks at Gotch will have.

This happens often to newsagents, an increase in volume for the slimmest of reasons. I think it is due to a flawed supply mode.  If I only had to pay when I sold a title, did not have to pay for returns freight and was compensated when a title did not achieve reasonable sell-through I am sure that this type of oversupply would not occur.

Magazine distributors tell publishers that newsagents have control over what we receive.  This is not true.

Every single extra magazine copy sent to newsagents which is well beyond what we need has a real and intangible cost.  It sucks our resources and our attention from products which could sell.

It is the work associated with magazine oversupply, even a few copies like with this Sudoku title, which diverts our attention from better selling titles.  Newsagents as well as publishers of better selling are the losers from this supply model.

While I acknowledge that magazine distributors have an excuse for most situations of what I would call oversupply, the facts of continued oversupply tell a different story.

Magazine publishers of more successful and carefully supplied titles need to work more closely with newsagents on the abuse of the newsagency channel through magazine oversupply.

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magazine distribution

More Royal Wedding opportunities for newsagents today

newidea-royalwedding.jpgWe continue to make the most of every Royal Wedding opportunity presented to us.  Today this New Idea Royal Wedding Special Souvenir Magazine is receiving prime positioning in several locations in-store.

I am not seeing any sign of interest in the Royal Wedding waning yet.  We even had a customer in one of my newsagencies yesterday asking if we would sell them one of the posters for this New Idea special – we had a locally printed copy on display yesterday announcing today’s on-sale inviting pre-orders.

Today we have more stock of Monday’s New Idea thanks to a reprinting decision.  We also have the AWW Royal Wedding special and more stock of AWW itself.  So we are well setup for the weekend.  I know that not all newsagents are this fortunate so I am not crowing too much.

What a terrific fillip this wedding is proving to be for us!

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magazines

Promoting range for Mother’s Day

mom-cross.JPGWe have included the Mother’s Day themed Lovatt’s BIG Crossword title from as part of our Mother’s Day displays.  We do this every year – because this tactical placement delivers incremental business.  Simple as that.  It is easy to place with Mother’s Day gifts.  I have seen shoppers drop this into their basket with a Mother’s Day card and a gift.  Where else could they purchase this crossword title for Mother’s Day.  I see it as a terrific point of difference.

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Gifts

Promoting Cosmopolitan Bride

cosmobridemay11.JPGWe have been promoting Cosmopolitan Bride with this aisle end display along with placement with our bridal titles.  We have allocated week or the display as space is in high demand and, frankly, we are getting a better short term response from some of our lower volume wedding titles – people are looking for something difference and newsagents are well placed to serve this need.

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magazines
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